Western Digital (NASDAQ: WDC) and Seagate Technology (NASDAQ: STX) have both outpaced the S&P 500 by a wide margin this year, driven by their data storage products. Solid-state and hard-disk drives have become critical hardware for the artificial intelligence build-out, and both companies specialize in those products.
While both growth stocks have performed well, if you’re trying to pick which to invest in now, there are a few key factors to weigh.
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Their growth rates are similar
Western Digital and Seagate Technology are delivering similar top-line results, and that has been the trend for many years. In its most recent report — for its fiscal 2026 fourth quarter — Western Digital posted 44% year-over-year revenue growth.
Seagate Technology’s most recent results also came from its fiscal 2026 fourth quarter, when it delivered $3.6 billion in revenue. That was a 48% year-over-year improvement.
This neck-and-neck trend also plays out if you expand the earnings snapshot. For instance, Western Digital’s revenue has a five-year compound annual growth rate of negative 5.3% compared to Seagate Technology’s 2.7%.
Both of their revenues were down significantly a few years ago due to the cyclical nature of data storage needs. AI has created a multiyear boom as hyperscalers continue to ramp up their capital expenditures. A major part of the investment thesis for these companies rests on the belief that the artificial intelligence trend will remain hot for multiple years.
Their gross profit margins are similar as well
Not only are both companies growing at similar rates and operating in the same industry, but their gross profit margins are also similar. Western Digital posted a 54.1% gross margin in its fiscal 2026 fourth quarter, while Seagate Technology had a 52.3% gross margin.
Some investors are concerned that these companies won’t be able to maintain those high gross margins due to their industry’s cyclical nature. However, that risk applies equally to both companies.
It’s extraordinary how similar their numbers are. Both companies have even forecast exactly $4.1 billion, plus or minus $100 million, for their fiscal 2027 first-quarter revenue.
Each company also hinted at continued momentum throughout fiscal 2027. Western Digital CEO Irving Tan said that management had “continued confidence in the durability of demand and with increasing visibility into our business.” Seagate CEO Dave Mosley mentioned “durable long-term demand for mass capacity storage” and seeing the momentum “continuing into 2027.”
